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Investing in China – Where to Start? – Caterpillar Inc. (CAT), Philip Morris International Inc. (PM)

Starbucks Corporation (NASDAQ:SBUX)

This company business development in China/Asia was impressive as Starbucks revenues grew by nearly 31% in the fiscal year of 2012.

In China, the company expanded the number of stores by 130 in 2012, which is second only to the U.S with 161 stores. The number of stores in China is still below the U.S, Canada and UK, but at the current growth, China is expected to pass Canada and UK within 5 and 1.5 years, respectively.  Moreover, the operating profitability in China/Asia is around 35% compared to 21% in the Americas and 0.9% in the EMEA. This is another indicator that Starbucks is harnessing the economic growth in China that is reflecting in the company’s growth. And since the profit margin is higher than other regions, this makes the investments in such a region beneficial.

I won’t dare to claim that these companies are the only ones or the best worth considering if you wish to raise your exposure to China and other countries in Asia. But these companies are from very different industries and their success in the Asian market varies. This should give you a sense that with reward there is always risk that could jeopardize your investment. But these companies are a good starting point to consider when examining the Asian market.

For further Reading see: Why Caterpillar isn’t Rising? Just blame Oil

The author holds no positions in stocks mentioned and does not plan to initiate positions within 120 hours of the posting of this article. This article is to be used for educational, research and informational purposes only and does not constitute investment advice. There are no guarantees, expressed or implied, of future positive returns in regards to the subject matter contained herein. Understand the risks inherent in investing before making the decision to invest or consult an investment professional for more information. Reasonable due diligence has been performed in regards to the information in this article. However, the author expressly disclaims any liability for accidental omissions of information or errors in fact.

The article Investing in China – Where to Start? originally appeared on and is written by Lior Cohen.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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